Mortgage applications edged up last week even as borrowing costs climbed to a four-week high, with a modest pickup in purchase activity offsetting another decline in refinancing, the Mortgage Bankers Association reported Wednesday.
The trade group’s Weekly Mortgage Applications Survey for the week ending Aug. 28, 2026 showed its Market Composite Index, a measure of loan application volume, rose 0.8% on a seasonally adjusted basis from the prior week. On an unadjusted basis, which does not smooth for normal calendar and seasonal patterns, the index fell 1%.
The split beneath that headline number matters more than the number itself. The seasonally adjusted Purchase Index rose 2% week over week, while the Refinance Index fell 1% and sat 19% below the same week a year ago. The unadjusted Purchase Index was down 0.3% from the prior week and 0.2% below its level a year earlier.
Rates at a four-week high
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances of $832,750 or less rose to 6.79% from 6.78%, with points slipping to 0.65 from 0.66 for loans with an 80% loan-to-value ratio. The effective rate, which folds in points and fees, increased.
“Mortgage rates reached their highest levels in four weeks as investors’ concerns about inflation and growing deficits push yields higher across the globe,” said Mike Fratantoni, MBA’s senior vice president and chief economist. “Refinance volume dropped in response, but purchase volume increased modestly over the week and was slightly below last year’s level. In many local markets, potential buyers have plenty of homes to choose, and this is likely supporting transaction volume.”
Rates rose across nearly every loan category MBA tracks. Thirty-year jumbo loans above the $832,750 conforming limit averaged 6.76%, up from 6.73%, with points falling to 0.40 from 0.50. FHA-backed 30-year loans averaged 6.49%, up from 6.46%, with points unchanged at 0.82. The 15-year fixed rate averaged 6.14%, up from 6.10%.
The one exception was the adjustable-rate product: the average contract rate on 5/1 ARMs fell to 5.94% from 5.98%, with points dropping sharply to 0.66 from 0.88. That leaves roughly 85 basis points between the average 5/1 ARM and the average 30-year fixed conforming loan, by RealtyWire’s calculation from the survey figures.
Borrowers reach for adjustable rates
Borrowers are responding to that gap. The ARM share of applications rose to 8% of the total, up from 7.9% the previous week. The refinance share slipped to 41.8% from 42%.
Government lending shifted as well. The FHA share of applications fell to 15.9% from 16.2%, the VA share rose to 13.6% from 12.8%, and the USDA share held at 0.5%.
The week’s reading extends a rate climb that MBA has been flagging since midsummer. In the survey for the week ending July 31, the 30-year conforming rate hit 6.81%, its highest level in more than a year, and applications fell 2.9%. A week before the latest report, MBA deputy chief economist Joel Kan noted that rates had risen roughly 20 basis points over the prior two months, damping refinancing.
The purchase picture has improved on that comparison. In the prior week’s survey, the unadjusted Purchase Index was running 5% behind the year-earlier pace; in the latest week it was down just 0.2%. Refinancing moved the other way, deepening to a 19% annual decline from 17%.
What it means
The verified facts are narrow: application volume was essentially flat, purchase demand firmed slightly, refinancing weakened, and rates rose about a basis point on conforming loans while falling on ARMs.
Fratantoni’s attributed interpretation ties the rate move to global bond markets β inflation worries and deficit concerns pushing yields up β rather than to anything specific to housing, and credits growing for-sale inventory in local markets with holding purchase volume up.
RealtyWire’s analysis: the survey reads as a market that has stopped deteriorating on the purchase side without meaningfully improving. A 41.8% refinance share is still high by historical standards, which means a large slice of weekly volume remains hostage to rate moves that have gone the wrong way for two months. The rising ARM share is the clearest behavioral signal in the data β when the fixed-rate option costs more, some borrowers trade rate certainty for a lower initial payment. That share is worth watching, not because 8% is alarming, but because the direction indicates affordability pressure showing up in product choice rather than in headline volume.
What to watch
Freddie Mac’s Primary Mortgage Market Survey, the other widely followed weekly rate benchmark, is released Thursdays at noon ET; its Aug. 27 reading put the 30-year fixed average at 6.66%, as RealtyWire reported as the Jackson Hole symposium opened. The next PMMS release lands Thursday. The Federal Open Market Committee next meets Sept. 15-16, according to the Federal Reserve’s published calendar, with updated economic projections due.
MBA’s survey has been conducted weekly since 1990 and covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels, with a base value of 100 set at March 16, 1990. More mortgage coverage from RealtyWire follows the weekly data and the lending market behind it.
